Warehouse REIT has swung to a £182m loss due to falls in capital values.
Announcing its annual results today, the REIT said it made £32.2m in operating profit, down on last year’s £35.4m. But the impact of valuations had caused IFRS profit to fall from £191.2m last year to this year’s £182.8m loss.
Chair Neil Kirton said: “This financial year saw a marked divergence between equity market valuations and the continued strength of the occupier market. Operationally, our performance has been strong; our focus on multi-let assets in key industrial hubs where demand remains firm but supply is constrained is paying off with like-for-like growth in contracted rents of 5.3%.”
Kirton said the REIT had “acted decisively”, selling off £90m of non-core assets in line with its disposals plan.
As a result, the REIT’s portfolio has fallen in value from just over £1bn to £828m, while net asset value dropped from £739m to £528.5m as LTV rose from 25% to 34%.
Kirton said the outlook for the coming year was far more positive. “There are clearer signs that investors are returning to the market, evidenced by activity across the sector and our most recent sales, which are ahead of book. At Radway, our flagship scheme in Crewe, we are now in advanced negotiations for a significant prelet, a major milestone which validates our ambitious but highly disciplined approach to development. This opportunity, coupled with an improved financial position and our 71% weighting towards multi-let assets, the strongest part of our market, leaves us well positioned for the future.”
The REIT also announced that senior independent director Martin Meech will be standing down in September to take up an executive position in the real estate industry. He has served on the board since the company’s IPO in 2017.
Meanwhile Simon Hope, executive chair of Tilstone Partners, which set up Warehouse REIT and acts as its investment advisor, has been appointed co-managing director. He will now run Tilstone Partners alongside Andrew Bird.
To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews
